Key Performance Indicators

One of our Senior Fleet Consultants, Danny Brashear, knows a thing or two about using the Business Intelligence of Key Performance Indicators (KPI's) to run a tight ship. Danny is the former Fleet Operations Manager of Lee County, FL. Below Danny will explain three critical KPI's that are important to any well-run fleet operation. But before we get started, what are KPI's and why do you need them?

KPI’s are different ways to measure how your Fleet Operation is running. They can often not only show you where you are today, but help you make decisions about how to proceed into the future. Many KPI’s are real time and are very useful for identifying when a process is failing or problematic. Other KPI’s may just be a reminder for those important tasks that people forget about. Since KPI’s are used for different reasons and for tracking different processes, some will need to be checked more frequently than others but a daily refresh is generally the minimum. KPI’s are often displayed as a chart, graph and/or gauge accessible via a dashboard of some sort, which allows you to then drill in to get additional results.

In this edition we will review three KPI's: Fleet Availability to the Customer, Shop Turnaround Time, and Direct Labor vs. Indirect Labor. These three KPI’s are the first of twelve KPI’s that Danny will reference in upcoming newsletters We recommend all Fleet Operations track these in some fashion if you aren’t already. Even if you don’t have a dashboard available, you should be able to use searches or reports to run the data you need to track them. Or, if your fleet system can’t produce the required information, you can track it outside your fleet system, but obviously tracking data within your system is best whenever possible.

Fleet Availability to the Customer

Recommended Goal

95%

Why Track This KPI?

Fleet Availability is the amount of time that the asset is available to the end user (operator) based on the working schedule of that asset. (Available meaning that it’s not broken down or out of service.) For example, if an asset normally works 8-5 Monday through Friday, then any time within that scheduled timeframe that the asset breaks down or is out of service (for any reasons), then that asset is not available to the end user (Customer).

This KPI is why many Fleet Operations run a night shift for their PM program so the mechanical work can be done after hours and will not affect the availability of that asset or interrupt their customer’s working schedule.

Reviewing this KPI helps you get better at being proactive. The more of your work you can schedule around the customer’s daily activities providing them with the highest use of the given asset, the more you create a “Win-Win” situation for everyone involved.

The goal is to have the highest percentage of availability possible for your customer end users. The standard Fleet Availability I see in my time with fleets across the county is 90-95%.

Shop Turnaround Time

Recommended Goal

75% Performed Same Day

Why Track This KPI?

This KPI is designed as a shop goal for the Technicians. The ‘Shop Turnaround Time’ is the amount of time from when the asset went out of service until the time when the asset is ready to go back into service. You can also think of this as, “How quick you can get the job done.”

Just like with Fleet Availability, if you can plan your workload and possibly get the parts needed for a particular repair or service ahead of time, it will definitely improve your ‘Shop Turnaround Time’ back to the customer. That being said, we know the reality is that not all jobs can be completed in the same amount of time. So you will need to set an average across the board..

The average I see in my time with fleets for Shop Turnaround Time is an average of 85% of all repairs and/or maintenance jobs being completed within 24-hours.

Breaking it down further, an example scale of averages would be:

0-12 hours

75%

13-24 hours

10%

25-48 hours

8%

Over 49 hours

2%

Because a Fleet Operation works on a wide variety of assets, you may see many different examples of the same scale used but with a different set of numbers. When reviewing this KPI, it’s also best if you can report on the same percentages per class of assets. This too will give you a good idea of those types of assets that your Fleet team may be struggling with or that they may need help with.

Another option if you have a dashboard available to you is to set a standard and once you go above your standard or threshold, then the KPI can change color or give some kind of warning that the KPI is over.

Shop Turnaround Time is also a useful KPI for using to benchmark against other fleet operations and as a service level promise to your customers. For instance, this information is often included in a service agreement and/or business plan.

Either way, this is a KPI that you should be following so you know what your shop’s true turnaround timeframe is and if you are performing in reasonable timeframes. If you find that you are not, it may mean you need to dig deeper and determine why your turnaround times are too high. Do you have enough staff? Are they trained properly for the assets they’re servicing? Is your garage large enough to service the number of assets necessary? Are your vendors providing reasonable turnaround times for parts and sublet assistance? The first step is to determine if you are doing well or need to look further for how to improve.

Direct Labor vs. Indirect Labor

Recommended Goal

90% Direct

Why Track This KPI?

“Technician Productivity” is another common name for this KPI. The real goal is to get as much as possible of a Technician’s time billed out during the course of their assigned, scheduled shift. It’s pretty simple math - the more you can bill out, the less money you lose.

I believe the National standard is about 75% direct vs. 25% indirect. Indirect time refers to things like lunch, break periods, shop cleanup time, and so forth - any time when a technician is not actively turning wrenches or working on assets. From a bottom line perspective, these times are just lost productivity and are usually not billable. .

One perspective on this is changing some of your shop’s processes. For instance if a Technician is working on a dirty job that requires the asset to be cleaned before they can even start the job, it’s possible that the cleaning should be included as part of what gets billed. The same goes for cleaning the shop bay if it has become messy due to the asset being worked on being excessively dirty. If the asset being overly dirty directly causes the bay to require cleaning, perhaps the cleanup should be part of what gets billed out.

Another consideration with this KPI is comparing the Technician’s total labor logged to the Technician’s shift time. Since a shop could have different shifts throughout the day, each Technician should have a set schedule that indicates starting and ending times and which days of the week for each Technician.

If you have a dashboard available, you should also be able to have a standard setting here where you set what your standard is and if a Technician falls below that standard, then have that Technician highlighted in a different color or stand out somehow.

This KPI will also help you to determine your fully burden labor rate based on the number of billable hours per Technician.